Bizarrely, this includes many flat owners, because buildings insurance is
bought on a whole-block basis and not individually so is counted as
“commercial”.
Private rented landlords and businesses are also excluded, because their
buildings insurance is counted as commercial.
There are 800,000 properties at risk of flooding in Britain which are
therefore ineligible for the scheme, and 70,000 of these are seen as “high
risk”, according to the British Property Federation.
And lack of investment in flood defences means hundreds of thousands of homes
will suffer from excessive insurance price hikes, according to the insurance
industry.
The Association of British Insurers questioned recent criticism, saying that
without the policy “the cost of helping people rebuild their lives after a
flood would either fall to the Government or to the victims themselves”.
The scheme, intended to be not-for-profit, will also be lucrative for
insurers, said Lord Krebs, because firms’ own risk in insuring flood-prone
properties will be reduced.
Ian Fletcher from the British Property Federation, criticised the Government
and insurers for deciding “on a whim” who is and isn’t eligible for the
scheme. He said: “The millions of owners of flats are not protected against
escalating premiums, while owners of some of the most valuable properties in
the country benefit.”
‘Flood wreaked £400,000 damage – but the insurance only went up £5’
Phil and Beryl Pyne, who live on the Somerset Levels, said their insurance is
affordable despite their home being submerged by flood water just 12 months
ago.
Their 17th-century Grade II listed farmhouse cost £395,000 to fix when the
area was badly affected by flooding in February, but their insurer, Aviva,
increased their premiums by just £5 a month.
Mr and Mrs Pyne, a retired couple in their 60s with four grandchildren, have
lived in their “Band F” property in Fordham, Somerset, for 40 years, and
qualify for Flood Re.
Properties in the South West in this band are now worth between £423,000
and £564,000.
“It was quite devastating,” said Mr Pyne, who with Mrs Pyne have lived in
rented accommodation for the past year. “My wife looked out the window one
morning and said, ‘look, our house has gone up in value – there’s a lake
outside!’ But by the afternoon water was pouring through the floorboards and
seeping into the first floor.”
The Pynes in their newly-decorated living room, one year after the
initial flooding
Mr Pyne, a former butcher who retired when he handed the family business to
his son, Malcolm, seven years ago, said: “I’ve been self-employed my whole
life and businesses go through a lot of turmoil, but when it’s your home it
is totally different.”
According to Somerset County Council, in the same month that the Pynes were
flooded so were 150 properties in the villages of North Moor, Salt Moor,
Fordgate and Moorland.
Are you eligible for ‘£500’ insurance subsidy?
The scheme works by capping the insurance costs for eligible homes, with
prices varied according to the property’s council tax band, typically
between £650 and £1,850 per year.
This is done automatically so home owners need not apply.
Flood insurance is the only part of the policy that is actually capped, with
homes in bands “A” and “B” paying up to £210 for this component, “C” paying
£246, “D” £276, “E” £330, “D” £408 and “G” and “H” £540.
Without the scheme, insuring these houses would cost between £300 and £500
extra per year, official estimates say – far greater than the £60 increase
to the Pynes’ annual home insurance.
All home insurance policy holders will pay a levy, estimated at £10.50 per
policy per year.
However, if you live in a flat, rented accommodation or are a business owner,
you may be excluded.
This is because “leasehold blocks” with four or more flats are ineligible.
There are more restrictions on blocks of flats, especially if the freeholder
does not live there.
The scheme also excludes properties built after January 1 2009, in order to
discourage people from deliberately building homes in high-risk areas
because they are cheap to insure.
But there is hope for past flood victims. In April, the Government introduced
a £5,000 grant for people whose homes and businesses were flooded in early
2014, regardless of where they live, to go towards fixing damage and
installing flood-prevention measures.
Affected householders have until March 20 to apply for the grant, and can do
so by contacting their local authority.
Anyone who thinks they are at risk can also claim council tax relief and local
community grants. In Somerset, for example, people can claim £150 to £1,000
if they are at risk, even if their home is not actually flooded.
Most insurers continue to supply flood cover to existing policy holders, but
this is not available to everybody, particularly where there are inadequate
flood protections or where future flooding is likely.
More: ‘My
Flood insurance is about to jump 500pc. What can I do?’
Share your story: kate.palmer@telegraph.co.uk